Should the Good and the Selfish be Taxed Differently?

Ngo Long and Frank Stähler

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: This paper considers an environment where individual actions have externalities, and where there are two types of agents: socially responsible agents (the good) and selfish agents. Selfish agents have payoff functions that do not take into account social welfare. The payoff of a socially responsible agent is a linear combination of (i) social welfare, and (ii) the payoff of a selfish agent. We demonstrate that the corrective tax rates that maximize social welfare do not depend on the degree of social responsibility of socially responsible agents. Hence, the good and the selfish should not be taxed differently.

Keywords: Efficiency-inducing taxation; externalities; social responsibility (search for similar items in EconPapers)
JEL-codes: H21 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2010
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Related works:
Journal Article: Should the Good and the Selfish be Taxed Differently? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:07-2010

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